ISSUE NO: 17
SEP-OCT
PREDICT THE MONETARY POLICY
The rates are the instruments of the
RBI for money control and
checking inflation rate. The group
of six people named as Monetary
Policy Committee will debate will
debate the state of Indian economy
and the direction it should take.
Present Rates:
Repo Rate
6.5%
Reverse Repo Rate
6%
Statutory
Ratio
Liquidity 21%
Cash Reserve Ratio
4%
7%
Bank Rate
sector, oil prices at reasonable
levels, it should be 6.25%.
Reverse
Repo
Rate–
Considering the spread, should
be maintained at 5.75%.
Statutory Liquidity Ratio – to
be maintained at the same level
as the 7th Pay commission has
become effective and a large
money supply has started
coming in the market.
Cash Reserve Ratio – can be
maintained at the same level
considering the BASEL- III
norms which is a cushion
against erratic price fluctuations
resulting in to liquidity crunch
faced by the banks.
Bank Rate- Can be changed to
6.75% to enable the banks to
lend the finances to borrowers
for enhancing the industrial,
business activities.
Currently, there are two schools of
thought:
1) Asking for rate cut of at least
0.25% in the Repo Rate.
Proposed Rates:
Repo Rate –With the easing of
monsoon worries, food prices,
rising demand in industrial
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Led by the Government sources
who want to push ahead thee
development works and reform so
that the GDP rate can be increased.